MOSCOW, January 27. /TASS/. The simultaneous growth in the supply of petrochemical products on the global market and the slowdown in demand growth rates have led the industry to a state of heightened competition, which could lead to the closure of old and inefficient facilities, head of operations marketing at Russia’s petrochemical major Sibur Viktoria Uvarova said.
"Many petrochemical prices are at 20-year lows. A number of global companies are performing worse financially than they did during the 2008 crisis," she said at the Ruplastica exhibition, comparing the industry's current state to an "ice age."
Growth rates in global polymer consumption are slowing, while supply continues to grow, Uvarova said, adding that the industry's "low" cycle has dragged on, which should lead to the closure of inefficient facilities.
Europe and Asia could become the main centers of global petrochemical capacity closures, according to a presentation by Sibur's top manager. In the EU, 1.1 mln tons of polyethylene and polypropylene production capacity has already been shut down, with another 1.5 mln tons under consideration. In Japan, 0.4 mln tons of capacity have been shut down, with another 1.3 mln tons potentially being rationalized by 2030. In South Korea, 0.5 mln tons of capacity have been shut down, 3.4 mln tons are operating at reduced capacity, and another 3.2 mln tons of capacity are planned to be cut. In China, capacity older than 20 years is at risk of being decommissioned.
In total, 17 mln tons of ethylene production capacity worldwide is at high risk of closure - up to 10% of all pyrolysis capacity on the market, Uvarova stressed.